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Since Sept. 10, the price of natural gas at the Henry Hub distribution center in Louisiana has climbed 20% from its close of $2.66 a month ago. Following this rapid rise, coal companies have seen their shares appreciate, reversing some of the downward price movement they have experienced for the better part of 2012.

Up until the second week of September, natural gas prices had remained well below $3/MMBtu. This had prompted many power generators, such as Exelon (NYS: EXC) and Edison International (NYS: EIX) to shed some of their coal-fired assets in order to take advantage of the lower-cost alternative. This reduced demand punished coal companies. Their bounce over the past month could continue whether we run into colder winter weather than last year, which would eat into the inventory surplus we are currently experiencing.

Keep an eye on your thermometers and November's election to get a good gauge on where these companies could be headed in both the near and long term.

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